A little-known loan program helps a Boise family end up with the perfect house

Special to the Idaho StatesmanMay 31, 2014 

  • The remodeling team for the Gallegos home

    General contractor - Elite Finish Carpentry & Remodeling, which also did finish carpentry, framing, cabinets, demolition, paint, siding and window installation

    Windows - Wood Windows

    Granite - Artistic Tile & Granite

    Plumbing - Optimum Plumbing & Underlayments

    Tile - NC Tile

    Roofing - Rolling River Roofing

    Electrical - Valley West Electric

    Concrete foundation - Western Concrete Construction

    HVAC - Chris Coulter

    Gas - Done Right Heating & Cooling

    Drywall - Quality Drywall

    Tape and texture - Wayne Wolkow Drywall

    Excavation - Young's Backhoe Service

    Craning - Continental Crane

    Flooring - from ProSource

    Lead inspection - LEAD Locators

    Insulation - G&G Insulation

    Carpet - Thumbs Up Flooring

    Lumber/siding/trim materials - BMC West

    Architecture - LCA Architects

    Lender - Prospect Mortgage

    HUD inspection - AAD Inspections

    Manual J provided by Air Comfort Zone/ Rubin Chervek

  • The NARI of Idaho Remodeled Homes Tour

    WHEN: 11 a.m.-5 p.m., May 31 (today), and Sunday, June 1

    COST: $10

    TICKETS AND DETAILS: available at any home on the tour. Go to www.nariofidaho.org to find addresses and information. If you have questions, call 869-6832.

    This annual tour of the Idaho Chapter of the National Association of the Remodeling Industry can really open some doors into what kinds of projects you could do in your own home. It's also a chance to meet remodelers who can help change the way you live in your home.

    "The first step to quality is having the right contractor," said Josh Mitchell, reciting his motto for his company, Elite Finish Carpentry & Remodeling.

    This is an invaluable opportunity to meet some of the Valley's most reputable remodelers and see completed projects in person rather than peering at them on someone's Facebook page.

    There will be a variety of projects from eight remodelers on this year's tour, which ranges from East Boise to the North End to Southwest Boise.

    Participating remodelers are:

    ELITE FINISH CARPENTRY & REMODELING: This home's story is featured on these pages. Large addition project that doubled the size of the house with new living space, open floor plan and new master bath.

    LEVCO BUILDERS/REMODELING: Kitchen was reversed, master bedroom added with bath created from previous bedroom; some of the back deck was improved, too.

    KEILTY REMODELING: Complete kitchen and dining room remodel.

    CK ROGERS REMODELING AND RENOVATION: Total remodel of kitchen and wall removal to open up the floor plan, which also included removing soffit to add height and removing peninsula for flow; also installed new hardwood floors, laundry and guest bath and retiled the fireplace.

    RENAISSANCE REMODELING: Carport and converted garage were demolished and a new addition to the home included a family room, laundry room, master suite and t-bay garage; the interior of the existing portion was gutted and rebuilt with a new layout and an open floor plan.

    STRITE DESIGN + REMODEL: Entire upper level was updated, which included a master bath, full kitchen remodel, new windows, new metal rail system and new wide-plank flooring.

    GAMMILL CONSTRUCTION: A complete redesign of the kitchen, dining, laundry and powder room functions; new cork flooring added throughout the main level, as well as new windows in the dining room.

    FINE KITCHENS & BATHS: Two rooms were combined to create a large kitchen with a fireplace and seating area.

  • 203(k) loans

    How many buyers walk away from a potential dream home because the home was "almost perfect"? If only it had another bedroom, if only the kitchen or bathroom was more acceptable, if only it had modern appliances, if only, if only …

    The average housing stock is often 25 or 30 years old and just doesn't quite live up to today's standards and today's dreams. That's where a renovation loan could be the right kind of mortgage. So often a home purchaser buys a typical as-is house with plans to put some remodel money into it as soon as they can get around to it. Sometimes it's hard to get around to that $15,000 project. But these renovation loans skip the as-is figure and go right to the as-completed value of the home.

    "It's the best mortgage product out there," said Bill Young of Prospect Mortgage, the loan officer who assisted the Gallegos with their project. "The possibilities are really unlimited."

    Yes, there is more paperwork, more hoops to jump through, more budget restrictions and a lot more planning. Often a HUD-approved housing consultant is recommended. Young has been a loan officer for 15 years, but about four years ago he realized there was a great need for someone who specialized in the area. Today, he even teaches Realtors and holds seminars about these programs because of what they can accomplish for people.

    There are five different renovation loan programs available, through either FHA or Fannie Mae. They come in two types - streamlined and standard.

    Streamlined loans are for projects up to $35,000. They can be for something as basic as updated appliances or a new roof or carpet. This is the most typical type of 203(k) loan. Standard loans are for larger projects, generally those needing structural or architectural attention. One of the loan programs is dedicated to foreclosed properties. (All these loans are for people who will reside in the home.)

    FHA loans top out at $271,000 of the as-completed appraisal. Fannie Mae loans top out at $417,000, with the renovation share of the loan limited to 50 percent of the as-completed value. (Fannie Mae loans can also be used for investment properties.) Detailed plans and bids must be submitted and approved before the loan itself is approved.

    Renovation loans are also available for refinancing projects.


  • Contact information

    Learn more about Josh Mitchell and his business, Elite Finish Carpentry & Remodeling, at 703-5020 or by email at elitefinishcarpentry@gmail.com.

    Learn more about NARI of Idaho and NARI of Idaho remodelers at www.nariofidaho.org. At the website, you'll find tips for hiring contractors, remodeling advice and more.

There are a lot of different ways to achieve your dream. When it comes to your Dream House, sometimes it requires a reevaluation of what's in your wallet or, at the very least, a serious redefinition of your desires.

The ideal house rarely comes onto the market the moment you need it or can afford it. Likewise, building the perfect home rarely fits snugly into the available budget.

But Jeff and Michele Gallegos found a way to create their dream home without redefining their hopes or robbing a bank.

They had lived in Meridian for nine years, but now they had three kids between the ages of 4 and 13. Anyone with kids can appreciate the family life of three kids in a too-small house.

"You can change your house, you can change the look of the house, but you can't change the location," said Michele. So they keyed on location. Jeff is a software consultant and Michele is a school counselor, but they were very focused on their children.

"We knew what schools we wanted our kids to go to," she said.

They couldn't afford building the house they wanted from the ground up. So they drove around their selected school district in Southwest Boise and they looked. And they looked. And looked.

"We basically spent a year looking for a home to fit our needs," Jeff said.

"Nothing fit our dream," Michele said.

They spent a year collecting ideas in a binder and even made offers on other houses that didn't work out. Even those were often compromises - not enough storage space, not enough room for the kids to run around and so on.

But then they walked into a 1,400-square-foot house on a huge lot and knew they had found it.

Wait - 1,400 square feet? Three kids?

"This one was it," Jeff said. "At the time, it didn't meet our expectations or vision, but we saw the potential. You could just feel that this is where we were supposed to be."

What made it work was a little-known, little-used loan program that combines the cost of a new mortgage with the cost of a remodel.

These kinds of loans are generally referred to as renovation loans.

"These loans are trying to create dream homes out of less-than-perfect houses," said Bill Young, the Gallegoses' loan officer, one of the few in the area who specialize in these types of loans.

"These programs are not even well known in the loaning community," he said. "They're a different beast."

And, as it turned out, the Gallegoses' dream turned into a beast of a project.


We're talking about a remodel job that took the 1,400-square-foot house and created a "new" spacious home that was more than 2,900 square feet when done. The kitchen alone tripled in size and became part of the whole wide-open living and dining space. It exudes a very comfortable, homey feel, especially when you consider the Gallegoses' three young, energetic kids.

The living space and the master bedroom are all part of what is new. The kids' bedrooms were part of the original house and received less-intensive work, but there were still bathrooms and other bits that needed to be tweaked and updated.

"I don't think there was anything in the house we didn't touch," Jeff said.

"This was so much more expansive than any other kind of project I've ever worked on," said Josh Mitchell, the contractor of the project and owner of Elite Finish Carpentry & Remodeling.

The paperwork alone was four times that of a normal project. With complex loan parameters on the project, there were a lot of deadlines, and the plan needed to be very detailed every step of the way.

"It was a learning project for all the people involved," Michele said.

Since the loan is based on what the home will be worth after the project is completed, that means the plan has to be inked in, contractors on board, and bids and estimates accepted before the loan can even be approved by FHA or Fannie Mae.

While most projects of this type are more typical remodel projects, appliance upgrades or fixing smaller, more nagging issues that are often more likely to tack on less than $15,000, the Gallegoses' project cranked the possibilities wide open.

Even for a larger project, doubling the size of the home was a pretty big undertaking.

"I have to give a lot of credit to all the experts involved, from the contractors to the lending and financial aspects," Jeff said. "Without them, we never would have gotten through this."

That's especially true when you're working with an older home and trying to make it all come together.

"We made it work," he said.

"After blood, sweat and tears, it worked," Michele said. "It was a challenging experience. We had to be creative. There's a lot of creativity involved in the remodel process."

In this case, there wasn't a lot of leeway in the remodel process. The budget was pretty much set in stone, and they had six months to complete the project, which took place, in this case, in the winter.


Mitchell turned out to be a great choice for the remodel project. He was a neighbor of the Gallegoses in Meridian when they first started their house-hunting. So he was someone they were already comfortable with - a high recommendation for anyone with any remodel process.

Michele said that without that personal relationship, the experience might have been almost unbearable.

"He had a clear vision - our vision - and he met what we had in mind," she said.

Mitchell and his Elite Finish Carpentry & Remodeling subcontractors had no experience with these kinds of loan parameters, but he was no rookie in the remodeling industry.

His grandfather was the second-largest builder in Idaho at one time, working on the Sun Valley Lodge and Idaho State University.

His dad started with cabinetry and is now a structural engineer.

"I grew up reading blueprints," Mitchell said. "I guess I just kind of fell into the industry, and I've had a lot of people help me along the way."

He's had good, steady experience over the years subcontracting with Strite Design + Remodel, Keilty Remodeling and others, considered some of the best in the Valley. He still subcontracts with about four or five companies, but 80 percent of his time is now spent with his own business.

"It was time to do it for myself," he said. "It's rewarding, and it was just time to take it to the next level. Every day, I love more and more what I do."

The Gallegoses love what he did, too.

"I don't think anyone had any confidence that it would turn out this good," Jeff said. "I was amazed at how well things blended together. You can't consider this a 1970s house anymore, and that was our goal."

The home does blend together well, and that is a compliment to the way everyone worked as a team, bouncing ideas off each other, coming up with creative solutions and dealing with trade-offs when it came to the strict budget.

"How many times did I say to Josh, 'We have to make this happen'?" Michele said.

The complexities of the process, the dream and the criteria were such that it almost makes one wonder how Michele and Jeff were able to come together on all these decisions and moving parts.

"Because we're soulmates, and we really have one brain," Michele said.

"They pretty much knew what they wanted, so that made the job easier," Mitchell said.

There are still other projects waiting down the line - like a revamped front porch, back deck, workshop and, of course, a playhouse remodel for their daughter.

But the home is done. It's not like the many houses that are sold "as is" and then end up sitting there for years waiting for the remodel that never seems to come.

It started as an older home in need of some attention, and now it's a dream home for a family of five.

"We're living our vision," Michele said. "This is what we worked for. This is the dream we had for our kids. And that's an accomplishment in itself.

"This house has character. It makes me feel like home. It's a really peaceful place to be."

Dusty Parnell is a freelance print, radio and video journalist who has worked in the Treasure Valley for more than 20 years.

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